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Well I thought $.005 might be low in short term simply because they need to raise money, and also I think some stockholders have lost belief in the company in short term.Cant say I did extensive chart analysis.
Actually IMO I wouldnt assume they have any more information than anyone else, if it is convertible financing they simply believe there will be continued volume in the stock.Convertible note holders couldnt care less whether stock goes up or down, what they need is contineud volume to sellin to but usually they keep under 5%, which tome indicates this may be a new investment though I guess it could be an old investment, we just dont know until company puts out 8k.
Could be quite right Magna filing if new funds could signal a turnaround I wouldnt be surprized to see stock drop to $.005,or share count to hit 150 million, before we see a dramatic turnaround.I mean realy- control of a mill, nearby gold mines , rising gld price, what mroe of a story do they need ? CFO did prove himself able in very tough market to bring in $400,000.
Maybe he will release the second mortgage in his name on the mill ( if I understand the filings)- what a positive signal that would be to show he believes in the company too !!
You could be quite right, just rare a reclamation bond disappears until project itself complete.In any case I doubt these funds will be available to the company to fund re opening mill.
I agree, especially if Magna is new source of financing, that itis quite surprizing how low the volume is. With all due respect to the CFO my opinion he has dropped the ball on IR side and should bring someone in to handle that side of things- if Magna financing things bringng in someone for IR, say $3,000 to $6,000 per month with options, would be a ggeat step forward. Nothing wrong with knowing where one's strengths lie.
Delays with production timetable permits etc etc dont worry me ( and I expect these), dilution of course necessary- what is concern to me (a) they have cash to survive (b) they develop a credible story and deliver.(c) better IR. This really should be a $.02 to $.10 stock this year in my opinion, and that is with my belief they will end up at least with 150 million outstandng this year.
I look forward to hearing more and hope this is new funding not conversion of old notes or debt.Yes this would be very positive news and in my mind remove one of the principal worries about this company.
I agree the Magna disclosure could be very positive news as if they went over 5% , even if a convertible it could indicate greater interest in funding more. As far as CFO 8k I believe neds to be filed within 4 days of material event, so hopefully we have an update soon.Would really like to see some cash in the door right now.
Out of curiosity why do you say it is a scam ? They certainly seem to be trying to get a permit, and hardly a scam if simply CFO doesnt understand IR and has been faced with tough financing environment the last year.What other choice has company had but to raise money however they could to survive ?
The press release refers to the report being prepared to NI43-101 criteria which one hand raises question how they using pre-2000 data to calculate resources. Having said that I may be in error, it may very well be a NI43-101 report just their wording is a bit odd in their press release.Read almost any press release about NI43-101 reports and instantly one will see the difference.
The information about the mines is most positive- these mines didnt have today's drilling or milling technology so very understandable potential for discovery.I believe reason for lack of market resposne one might expect is company continuously avoids key information investors would like - capex required, operating costs, terms of orders, working capital requirements. All information they infer in their press releases they have.And an update on projection of the start date. There is no reason for company not to release such information since they have already released a start date, forecast revenue, and gross profit percentage.
CFO seems pretty sharp, maybe he should recognize IR not his strong point.This stock should be trading in $.02 to $.04 range with all its potential. As far as operational side, not sure if CEO grasps modern permitting. Does he have any practical experience in a producing mine in his background or is his background more in exploration ?
It would seem logical bond wouldn't be returned as it is a reclamation bond however maybe those who have stated it wil be have a specic reason for saying so. Reclamation bonds are normally for when a site closes.
Environmentalists almost always throw up some objections to anything. To be expected.
Well NI43-101 is a good thing to have, but the company doesnt have them, they have reports prepared according to the criteria of the NI43-101 accordng to company.I have no reason to believe the company doesnt believe that. However I agree it is a positive sign the company is preparing such reports though my opinion is they have a serious credibility problem with the lack of disclosure of key variables. The NI3-101 reports do have guidelines on use of historic information of which it is not at all clear whether they have been followed.
Having said that the grades certainly appear to be commercial grades, and even forgetting what I consider the non-sensical and overly-promotional practice of quoting value without considering costs to extract etc, certainly company has the elements of success- rising gold price, control of a mill, winding its way through the permitting process, management with lots of financial incentive.
IMO price will drop and dilution is a necessary evil- how anyone can think a company can operate with no money and no dilution is beyond me- but I still believe the chances of a great return on this stock are present.They do need someone with IR experience to craft and deliver their message if the company wishes to be taken seriously the closer they get to production, IMO.
Thanks for the explanation. Do you feel the work required to meet the conditons will not cost any money ? Do you feel it will be completed, meet inspections, any challenges from environmental groups, etc in time for a Sept/Oct re-opening ?
Does it say explicitly anywhere the bond will be returned ?
just curious though- what single activity of this company has resulted in revenue or cash flow the past 3 years, if none why would things change ?
there is no option but to reverse the stock if the company is to have a future, and may bokerage firms wont accept stock certificates at this price range, an obvious damper on financing possibilities.
again, i find it interesting that no one who is positive on the stock can name one concrete positive result the past three years of the CEO's efforts.
It is the company that has released a projected start date, gross profit percentage, and announced they have completed a report that shows the economics are positive. Usually as a company approaches production there is more not less information, and companies strive to build investor confidence they can deliver.
I will give company benefit of the doubt that they honestly believe they will start producton in september/october , though for the reasons posted previously it seems a bit over-aggressive. They could prepare for delays by outlining steps still outstanding but qualify according to unknowns. Reading that some investors think they may be producing even earlier than September just highlights the communication issues.
They could build confidence by outlining the actual general terms of the orders, and letting investors know projected CAPEX, working capital needs, and projected operating costs. BY releasing start dates, estimated revenue and gross margin percentage it is the company not shareholders that opened the door for all the questions.They have stated in their press release they have made estimates so it is not as though they dont have the information.
I believe the company will wake up or get an IR professional very soon and release more information,and do another convertible deal before things get any more difficult for them.
My two cents- first cease and desist order to me a non issue, i.e. they simply have to meed the conditions attached to the permit granting, and while i have doubts that this can be done for no money and by september, nothing seems to indicate they wont eventually get a permit. since i think gold going higher, the area has history of gold production,and they control a mill i feel this is a reasonable speculation.
As far as the metal in the ground simply this isnt a way to value a company unless more information avalable. While there probably is mineable ore in the nearby mines and at this price of gold probably can be mined at a profit, which for a stock under $.02 is probably enough to make a small speculaton on. The very type of information they release is the issue, very selective and limited. If the profit would only be $60 million and takes $20 million to realize that obviously a different picture !
As long as there is volume there will be people willing to issue convertible funding one would think, I would find it more interesting what type of investment they made- if a private placement IMO that would be VERY good news.
well certainly dont want to play my cards ! seriously i would just like to get a bit more comfortable that is all.
No one is looking for blue chips, and as I have posted I am here for the speculative potential, and trying to gauge whether to put more substantial investment in,and when. I do not think it is unreasonable if they selectively put out projections that key information is left out to aks why. I would think all shareholders would want some more clarity.
Nice to see press release with breakdown of categories, recovery rates etc. Press release specifically does say they have a projected operating cost and CAPPEX projections, so I stll find misleading projecting total value not discounted for these factors. Maybe nit-picking, because at this market cap just the potential alone of they can re-negotiate purchase terms or stretch out, is quite interesting.
I wonder though how old the data is that they are working with, whether it meets NI43-101 requirements to be stated as a current or historical resource.
Come on CGFI you have nothing to lose projecting forecast operating costs, and CAPEX required, and updating forecast when operations would start.
What in the last 3 years would give confidence management can identify an opportunity and then execute ? Can you name one of their deals the last 3 years which was successful in generating cash flow or revenue ? Just one and I will buy some stock! They probably have to do a reverse and sooner the better, and perhaps CEO should stick to technical matters and bring new CEO in (and hopefully someone who understands US GAAP accounting). If the Pope could step down why not this CEO ?
I have to ask, looking at the last three years what gives you confidence current management is able to deliver based on track record last three years ?
IMO reason market cap level is direct result of management inability to instil confidence in the market by lack of information that would provide investors more confidence in projections and timetable for returning to production.My own opinion is that this is due to lack of IR expertise, and CFO's inexperience in this sector. Second the last 13 months 90% of mining stocks have had stock price declines and most juniors hurting for lack of financing.Third the DTC chill must limit the CFO's options for financing and/or some investors interest in buying the stock.
I believe I have tried to be objective about the stock but I am hesitant to invest more signficant sums until mangement can show a clearer path forwards- I dont mind delays and problems, just the lack of clarity is a bit worrisome. I for one would jump to buying more stock if they released a new update that provided more comfort and realistic projectons.They must have a realistic projection by now whether tey wil meet the September/October start date.
Are you stating one can value resources ( which havent been upgraded to reserves) without knowledge of costs to extract, recovery rates, capital investment required,NPV or IRR ? (Let alone copy of the NI43-101 report).
I have to check but I think in Canada home of the NI43-101 exchange frowns ( like SEC) on estimating values by "metal in the ground" for the very reasons noted above.
However certainly the historical reports indicate all sorts of potential !
Main immediate value IMO is the control they have on the mill, and that they are slowly winding there way through the permitting process. CFO last year generated enough cash to cover negative operating cash flow of some $400,000, one has to believe that with progress on the mill at the least he can generate sufficient convertible financing to do the same. Pretty gutsy for him to have control of voting stock, a second mortgage on mill in his name if I understand, do a 5000 to 1 reverse split, and stil have stockholder support.But he certainly has incentive to perform and ability to evdiently instill confidence in stockholders regardless of company's track record.
IMO if he does pull this off stock could deliver superlative speculative returns.
Evidently the state issued the cease and desist order and company applying for permit which has been approved but subject to several conditions. So one can assume when those conditons are et they can apply for a removal of the cease and desit order. Looking at the filings one could get the impression that whomever ws handling this permit process initially perhaps was a bit unfamiliar or handled poorly, for example criticism state gave for lack of certain baseline studies which are pretty standard. However hard to critisize company too much as all companies have increasingly difficult permitting process.
It is a bit difficult to figure they can meet conditions without any cash, get approved, then remove cease and desist order, with no delays by local environmental groups, and be in producton by September.
Wait a second, the conditions to the permit require work and were issued so that eventually mill could operate- and obviously to meet conditions they have to do work.
IMO the issues are whether they have cash to complete work required, timetable for state to remove conditions and reverse the cease and desist order, and how on earth can all that be accomplished by september/october. It is extremely aggressive in my opinion for company to maintain its public projection of a start date in Septemer/October, however it certainly might be possible.Hard to judge due to limited information company releases.
IMO share count will get to 150 to 200 million this year. I base this on the existing convertibles, and what I believe is a logical estimate that a company going into production and having payments on acquisitions ( which probably will be negotiated), the mill, etc etc. will need at least as much as last year , $400,000 some, to get through the year, plus roughly $.02 share price on average.
However why would a billion shares not be possible if (a) share price decliens below $.01 (b) cash requirements higher than $400,000 (c) delays in mill re-opening or more permitting issues arise, etc etc. Based on companys track record it would seem this is a possibility though I dont think probable yet. So what ? This is a speculative stock betting that CFO can pull this maybe more shares outstanding will provdie mroe leverage to average down before the mill opens.
The reclamation deposit is referred to in the 10k as an asset retirement obligation which is how I understand a reclamation deposit-i.e it is to reclaim the property once operations cease. Therefore I do not understand how it would be expected that these funds would be available to the company in the short term, and apparently accountants also agree because it is not a current asset on the balance sheet on the 10k.
I guess though there seems so much confidence that the company has funds to operate and to re-open the mill that management must have shown investors its ability to meet objectives in a timely manner, and somehow the cash needs of the company are minimal at this time.I admit I do not understand all this but guess have to wait for the next 10q to get a better grasp of all this or some sort of corporate update.Thanks for patiently answering my questions.
First time I have ever heard a reclamation bond is to be returned before site is reclaimed. If that is the case wouldnt it be recorded as a current asset ?
I agree they will probably re-negotiate whatever they can, though I would expect some cash or shares would be requested.My understanding there is a mill payment also due in June.
My basic point is that I do not understand how they can (a) perform improvements required to remove conditions to permit (b) make quarterly filings required of a public company (c) gear up to make a mill operational which means turning over the mill to work out any bugs, purchase materials necessary to run mill (d) be prepared for safety inspections (e) have working capital for salaries etc; without some cash balance.
I still believe that if they needed $400,000 to cover operating cash flow last year, they need at least the same before they would start collecting profits this year. If stock is at $.015, take off 50% and $400,000 in convertible financing, that is another 53 million shares. Just my opinion as I do not know what it will take to get mill operational, but I do know it will require some cash. And if they add another 50 to 80 million shares but reach profitability, obviously stock should go up absent some very inept IR work.
I agree IF mill is operational by September/October, and since apparently within reasonable distance there are producing mines, benefits of transportation costs etc shoud lead to some custom milling business.( though having different elements in the ore can make it more complicated the milling).
On the mill isnt there a payment due in June ?
If those financing arrangements for more convertible debt are still open, that would be one path to raising funds which I guess we will find out on the next 10q how much was drawn down, though I would have thought an 8k would be filed as they drew down on any such convertible financing.
I still project 150 to 200 million shares because I highly doubt company doesnt need working capital to re-open the mill,and even if they re-negotiate various debts some cash will be needed to keep the doors open.IMO
Very good point that even if they reach 200 million shares outstanding that if they meet those sort of projections it wouldnt matter.
As far as revenue projections I have posted my opinion that without some basic information hard for investors to judge the probability and hence have incentive to invest more.However if shareholders are happy with management track record last few years and have confidence that regardless they can pull this off maybe management right in being selective about information released.
I am in complete agreement this is a speculation, just trying to decide whether to increase investment or not, and to learn more about the company. I admit a certain fascination at the lack of information about how the projections are to be met or even the lights to be kept on, but no for a stock at this price one fully expects it to be extremely speculative.
I do care about the lack of information because I do believe how management, communicates can effect the value.
Agree shareholders dont,shouldnt, cant run the company, but certainly it isnt out of line to ask some basic questions.
Well my two cents on the mill and dilution : getting the mill operational will take further funds and for this company will have to dilute. I am not sure why anyone would think company can operate with no cash and no dilution. Even if company only needed to generate cash like last year, $400,000, that would be at $.02 that would be 20 million shares, excluding any shares issued for services or any remaining balance on the convertible notes. I still feel comfortable projecting they will reach the 150 to 200 million outstanding share level this calendar year sometime.
Doesnt mean a bad speculation, but again IMO company cannot operate with no cash, and that means some dilution. Second to raise real money for exploration and development that means a reverse to get share price to a level serious money might come into this company. CFO has a big task ahead of him.
Could be a surprise though if nearby producers cough up money for mill if terms are to their liking. Of course we dont know terms of the "orders".Of course no idea how they have paid bills last three months. Of course no idea remaining working capital necessary to get mill operational. Very frustrating for an investor.
I admit it is certainly a possibility all vendors accepting shares or someone paying their bills, but wouldnt that need to be disclosed such share issuance or loans to company ?
Or is company in worse shape than we suppose ?
Where does a valuation of 600 million come from ?
1 Valuation from metals in the ground : This is meaning less unless one has the Net Present Value (NPV) which incorporate capital required, extraction and operating costs projections, to arrive at the net present value. If you have an ounce of gold in the ground worth $1600 but it will cost X amount to get tready to produce, Y amount to mine, and Z amount to transport and receive funds etc, that ounce of gold is worth less than $1600. So using metal in the ground as a valuation is meaningless,and overly-promotional.This is why generally SEC frowns upon such calculations. If their filings get reviewed SEC may look at such press releases and request a retraction.
2 Resources to Market Cap : Some analysts for a quick valuation may look at resources and market cap. ie compare to other pre production companies value divided by resources. However we have no report showing category of resource that is present.
So I am quite interested where this valuation come from ?
Yes I am sure everyone would like to think mill will be operational by the time being forecast, especially in absence of any update. As some simply and logically wrote, what we have is simply hope at this point.
I dont understand how anyone could think there wouldnt be more dilution. What choice does company have ?
1. Debt financing for all cash needs- unlikely without collateral ( mill has a 1st and 2nd) or cash flow.
2. Client Financing :It is possible people who want to mill ore at the POW may provide some operating financing to do so, but a bit of a stretch to expect they would finance all the company's needs
3. Dilution through use of Equity/ Quasi-Equity : This is most probable as obviously at some point company needs some cash to operate with. I am fascinated by the concept that this company wont dilute and they dont need some cash to operate with, yet will be operating a mill by September.
Dont get me wrong, this company at 150 to 200 million share this year - which is the minimum I think they will reach-but producing or with clear path to production is not a bad speculation.
How do you arrive at a valuation of the mining properties ? I agree mill has value and certainly replacement cost more than what the purchase price was. But how can you assign a value to the mining properties ? We do not know even estimates of -
1. What category of resource is present
2. Cost to develop and extract
3. There is no Net Present Value Calculation (NPV)or support
4. No calculation of Internal Rate of Return (IRR)or support.
5. There has been no feasibility study to establish reserves.
I would like the price to go up as much as anyone and agree there is some speculative value here, but there is no information as to what sort of resource do they have whether just potential, or inferred,indicated or measured,the standard categories. The SEC frowns on inferred classification, but mineralized material can include indicated and measured. For reserve study they would need calculations on capex and operating costs, and cash flow forecasts.
We do not even have a rough calculation of working capital necessary to begin operations.
So I am curious how can one assign a valuation of 1/2 a billion dollars ? I think we would all agree if they had established reserves they would announce them.
Yes they have a control of a mill ( on which the CFO if I understand has the second mortgage), options subject to payments on some nearby mines, high gold,silver and copper prices, a public company, and winding through the permit process. All very true. They are also a penny stock with a DTC chill, only $5,000 in the bank at end of November, and substantial cash needs to maintain ownership and options on what they do have, and have publicly portrayed they are going into production Sept/Oct.
A very very speculative scenario but it does seem in absence of any tangible information of how company will get through to September production, the best we have is hope at this point. But so what, it is just a speculation at this point and could be an excellent one.
Good direct answer, the belief they will succeed is based on hope, same reason fore a small investment I have had no problem gambling. However before investing a more sizeable amount I am waiting for something tangible in answer to the question I raised.I know full well $5,000 for three months is not enough cash, and I suspect everyone on this board knows that too. So your answer is very refreshing in its directness.I do hope they pull this off, but I suspect some serious bumps along the road. My own opinion is CFO should just bite the bullet, put out a frank update and let the chips fall where they may.
I called tradestation and they didnt indicate one could short the stock there, so my quest for where one can short this stock continues !
Certainly a reasonable answer , but my response :
1. This is a public company that is supposed to report material events, and they are the ones forecasting the September/October start date, revenues and the gross profit percentage- but without other key pieces for investors to judge the forecast. If they are worried about unforseen events, certainly normal and especially with a CFO without experience in minings sector, then why give such an optimistic forecast ?
2. I agree there are many variables and reading their 10k under the boilerplate they do state many risk factors. However the 10k also has a section on forecasting working capital needs, and they do except related to getting mill back in operation.
3. I quite agee a conservative approach should build credibility and support the stock long term.That actually is my point, by being conservative, outlining the key variables and being conservative and meeting projections would do a lot to build confidence in the company.
I have pretty much finished my iitial due diligence. I am trying to understand how a company with $5,000 or so at end of November, no funds raised for 3 months, forecasting a start date in several months, and forecasting revenue and gross profits, little information on capex and working capital required, any sort of detail on $9 million in orders, and very little information in accordance with SEC Guide 7 or standard information on their mining properties, can expect investors to assign a degree of probability to the Sept/Oct start date.
The issue of holding things close to their vest or being careful about forward looking statements doesnt hold water IMO - they specifically give (a) forecast start date (b) forecast revenue (c) forecast gross profit.
I am not saying cant be done, they did bring in $400,000 last year, they have progressed with their permitting process, and maybe lack of cash meant that the permitting process wasnt handled as best it could have, and most junior mining companies have had financing problems. And so what if they get to 200 million or more and have to do another reverse,it is a penny stock and these things happen, wouldnt surprize me in the least.
So I guess my question remains, what gives stockholders confidence that company is on track to meet their own projections, and that company can afford even to stay public without some cash infusion ? Besides saying a strategy of keeping things close to the vest, what give us confidence that one should put larger amounts into this stock ?
IF CFO made a mistake in forecasting a Sept/Oct start date,then bite the bullet, put out a corporate update with best spin possible.Just my opinion of course, because it seems all sorts of people believe they are going into profitable producton Sept/oct, I am just trying understand why people believe that.
Sorry I just have to ask, what tangible information is there that there is a high degree of probability the mill will be operational this summer. Does company have funds to open the mill even if permit is granted without any conditions ?Can they raise these funds in this climate with a sub-penny stock with a DTC "chill" ? My understanding is company has been predicting August/September as date mill wil be operational, which would mean at the latest July/August they would need to have employees in place, supplies, any permit required construction done, and personnel hired, and of course confirmation of orders for material to be delivered to the mill. Do we even know that terms of the "orders" received can be met after all this time ? I would hazard a guess to be open by end of August would require by June that working capital, hiring plans, supplies to order etc etc would need to have been made.So that would mean 4 months to meet permit with no conditions, raise capital for maintaining company and opening mill.Just a question- doesnt this seem a bit overly-optmistic based on little current information ?
Company could easily answer these questions, and they cant complain they cant release forward looking infromation since they already do.I would rather a 70% chance of going into production next January than a 5% chance of going into production by end of August.Just my opinion of course.
Hi Les,
Yes I do believe company is not very transparent.
1.NI43-101 reports : If I compare their press release to almost any company I know reporting NI43-101 reports their press release extremely limited in information presented. Really, how can you mention a report prepared according to NI43-101 criteria, then release almost no key information.
2. Pre-Production Information : I do not know any ocmpany forecasting production in less than 6 months, that does release some limited information but not other key information Again they forecast revenue, gross margin percentage, and in their 10k forecast all sorts of cash requirements except capital required to start up the mill unless I read incorrectly. I looked up a few of the symbols you mentioned amd they were not pre-production; Hondo I looked at their 10k, certainly much more information than CGFI.
3. SEC Guide 7 : It is only a few page guide that most transparent companies follow, if nothing else because when SEC does a review of small company filings they go by this. I fail to see on this company's filings they follow the required disclosures.
However I do feel since they control a mill that this could turn out to be a great speculation. Just my DD turns up more questions than answers.Just my opinion.Perhaps just me, I just do not understand how they can run a public company going into production with $5,000 in the bank.
quite agree using the price point you mentioned existing convertibles probably wont be more than 10 to 20 million when converted assuming a lot has already been converted already.